It has been awhile. In April, 2014, I started the “The Road from Here” thread, where I hoped to foster a discussion of where MLS should head in the future, both to advance the sport and the business that is Major League Soccer, LLC. Many posters responded with some incredibly insightful posts and (while the thread likely had little to do with it) MLS did in fact make some changes we discussed. A couple of thousand posts later, it seemed appropriate to call time on the thread and the discussion. I didn’t exactly walk away from Big Soccer a couple years ago, but aside from the occasional thread here and there, I curtailed my posting a lot because I really didn’t have much else to say. With MLS filling out its map nicely, TAM boosting quality and Atlanta’s spectacular success, it was hard to find much fault with the economic structure of the league – which is what the first thread, “The Road from Here” was all about. Of course, it hasn’t all been great, from the fiasco in Columbus to the failure of the USMNT to make it to Russia (and provide additional exposure for the league), to the litigious NASL. Still, there are other threads to talk about all those things. That said, I think it is perhaps time to start a new thread and a new conversation about the economics that are going to shape MLS in the future because I am convinced we are in a period of unprecedented change. Without getting to personal here, these days much of my time is spent serving on corporate boards for companies involved in commercial real estate, banking and health care. What these seemingly disparate businesses have in common is that each is grappling with profound changes in the digital era. These organizations (like so many others) are focused on moving from a bricks and mortar footprint to embrace the realities of digital which is rocking their world. The economic models we were all certain about even ten years ago tremor with the closing of each retail store, rural hospital and bank branch. The data is now so compelling, the pace of change so rapid, for all but the flat earth society it’s no longer even debatable. At least in the board rooms I am in, the consensus has long been we either embrace digital and adapt to the realities of the digital world, or these organizations will die. It’s a challenging, often painful process which has caused a reexamination of some long held assumptions underpinning many business plans. Which brings me to MLS. I'll put that in the next post.
Awhile back, I read an interesting column about the Big 10 conference expansion by Ty Duffy in “Awful Announcing.” Duffy makes the point that while adding Maryland and Rutgers to the Big Ten’s “conference footprint”, thereby gaining access to the large and growing New York and D.C. television markets, has been highly lucrative for the Big 10 Conference and the Big 10 Network, as cord cutting continues and cable continues to die, the strategy seems far less sound. Duffy notes: “We’ve reached the point where outrageous live sports rights figures will diminish. It’s hard to see ESPN or FOX shelling out stupid money for college football today, much less in five or six years . . . Cable’s death carries uncertainty. There’s no precise gauge of what will happen. What I can predict is there will be a profound shift toward quality of games vs. volume of games . . . Whatever outlet is streaming college football games in the 2020s will not want the bloated buffet of games. The present model favors the conferences. ESPN and FOX need live sports content to get cable providers to carry multiple networks. That changes if you’re dealing with Apple or Amazon.” Duffy ads another important point, as streaming increases and television revenue decreases, “Teams will need to fill their stadiums to make money. Having two of the seven home games be against [quality] live opponents won’t be a viable business strategy. Non-conference scheduling will have to be better. So will conference scheduling.” Here's the entire column: https://awfulannouncing.com/ncaa/big-ten-adding-rutgers-maryland-major-problem-cable-dies.html Duffy is speaking about the Big 10, but I think you can insert “MLS” in its place and his analysis is equally on point, perhaps more so. Soccer fans are younger and more digital even now, and MLS faces competition from leagues in Mexico and Europe. The idea of moving games from cable to streaming isn’t that far fetched. YouTube reportedly considered a bid for rights to the English Premier League back in 2016, which never materialized. https://www.pastemagazine.com/articles/2017/03/the-premier-league-on-youtube-its-not-as-far-fetch.html For its part, MLS saw the digital wave coming sooner than many, and used part of the proceeds from the sale of a share in SUM to Providence Equity Partners (which SUM bought back last year) in part to upgrade its digital presence. But its more than just having streaming capabilities IMO, what other companies are finding is that other aspects of their business have to change as they move into the digital era where they now confront competition from markets that were once far more distant. That’s not entirely new territory for MLS – again, it’s a global game. As the pace of change accelerates, however, I think the topic warrants fresh consideration. As sports broadcasting moves into streaming where games are purchased by fans a la carte, to generate meaningful revenue does Duffy have a point? Is the quality of the teams and the game being offered going to be more important than quantity of games – the “bloated buffet of games” -- the league provides? I think it will be. And that, to me, poses tremendous challenges for MLS and its business model. ESPN and FOX generate money to pay for live sports based on carriage fees passed on to every customer in their monthly cable or satellite bill. If you don’t watch ESPN or Fox Sports, but those stations are bundled with other channels you do want, you are effectively still stuck paying for them. A 2017 study indicated that while ESPN is the most expensive channel, charging distributors an average of $7.21 per subscriber (plus an additional 90 cents for ESPN2), it’s only the 19th most popular channel with customers. In other words, lots of people are being charged for sports programming they do not value. http://time.com/money/4700663/cable-prices-most-popular-tv-channels-espn-abc-discovery-hbo/ The industry is responding with streaming and “skinny bundle” options that allow consumers to avoid some of the high priced channels like ESPN that are shelling out all this money to sports leagues for live content, but whether it is the skinny bundle or compete cord cutting, the economics are clearly changing: https://www.techhive.com/article/3195776/streaming-services/this-is-how-the-bloated-tv-bundle-collapses.html Based on ratings, it is safe to say few of the customers paying their money cable or satellite bill ever watch an MLS game. The league still doesn’t attract many television viewers, but it does provide sufficient content at a decent enough quality to justify the decent contract eight year, $720 million contract for the rights to its games with ESPN, FOX and Univision that runs through 2022. http://www.philly.com/philly/blogs/thegoalkeeper/Live-MLS-US-Soccer-officially-announce-new-TV-deal-with-ESPN-Fox-Univision.html?arc404=true But what happens to the value of these national broadcast deals when the customers who are now stuck paying for these MLS games most do not watch actually have choice? It can’t be good. MLS has never enjoyed huge broadcast rights money, but growing that revenue has always been a keystone of the league’s plan, including an important factor behind expansion. Garber told the Tennessean not long ago that while market size was not the sole criteria for expansion, clearly “market sizes matters because it can help, logically, grow your national television audience.” https://www.tennessean.com/story/news/2017/07/09/mls-garber-nashville-expansion-qa/461887001/ It’s a model that’s served sports well for decades, but in an Amazon world where fans may have the option of paying for specific games, that’s far from certain IMO. I submit MLS is going to need to re-think some of its core beliefs that go to the heart of how MLS is structured, and with negotiations on the new CBA about to start, there is no time like the present. If others find that interesting, I’d like to talk about it here in this thread. Let me pose some questions: What if MLS had to compete on the basis of quality for most of its broadcast rights revenue on a platform like Amazon where fans can literally pick matches from all over the world? Is that even possible or affordable for MLS to succeed in that kind of environment? If it isn’t an if MLS is going to be dependent on local broadcast revenue (what’s left of it) and attendance in the future, is the present league structure and expansion well suited to that? I note that year on year attendance is down for 13 of the leagues 23 teams as I write this: https://soccerstadiumdigest.com/2018-mls-attendance/ As the league gets bigger and talent more evenly spread, does attendance actually suffer because there aren’t enough attractive opponents on the schedule? Several years ago, I thought the day would come where MLS could sell higher quality. Now, I think it might eventually have to. Perhaps soon. I welcome your thoughts.
My immediate thought is that MLS is already practicing a model that is dependent on things other than national media revenues, so if the shift plays out as you suggest there's not much room left to adversely affect the league. The Big Ten is coming from a point of excess, and their product of college sports is waning due to factors above and beyond market penetration or media expsoure. Their stock has essentially been bought high whereas MLS has been bought low. Granted, theirs has a stronger track record and potential, but they have decidedly farther to fall in a worst case scenario. But the quest for quality on the pitch, as relates to your discussion, is relative to the knowledge base and taste of the viewer, as well. Many MLS fans probably still can't define how or why MLS might be inferior to the European leagues or could illustrate how the league has improved since 1996. For them, as with many sports fans, the appeal is about the full gameday experience and the ability to find supporting outlets that will round out how to follow the league, teams, or players. MLS has fantasy leagues and online news forums, we now have development academies and can follow the progress of local players, and we've established a brand and identity that was not available to consumers years ago. So MLS has caught up to their peer sports leagues in terms of the full on product, and the quality of play compared to bigger soccer leagues will come as more and more players are able to rise through the ranks and pursue the sport as a full time career. Remember, as recently as the last CBA many players were still making so little in salary they needed second jobs. That's hardly an incentive to become a better player. So MLS for now needs more of the same, I say. Another generation of stability while the teams develop their academies and become entrenched in the US sporting landscape, coupled with continued investment in the quality of media productions, will give the league more breathing room.
Thanks for starting the thread! So many interesting questions. So this is the premise: we’re moving to a world of narrow streaming – you can buy each game individually or subscribe to each team individually. If all games are equally easy to watch, most people will choose the best teams. Financial resources will be directed a few top teams even more than today. MLS can’t compete directly against the best teams so it has to have a local focus. I’ve always been bearish on expansion with the idea that once you’re beyond a base level, all expansion does is split the national TV pool into smaller pieces. But if TV doesn’t matter, then why not? I suppose mass expansion is one viable model. Put 20,000 seat stadiums in the 50 markets in the US that could support them. And I’m not sure this is too far off from what MLS seems to be doing now (in a slow, responsible way). I’ve heard it said that in Germany, people follow their local team and they follow Bayern, one team for group identity and one team for the highest quality. Maybe now every American would have a Champions League team and an MLS team. But I also worry that sports attendance is going to suffer too. It’s a particularly inconvenient form of entertainment, particularly for a generation that is so closely tied to media. This is the "declining attendance" view of things. I think MLS needs to have stories to fight for its bit of attention and for stories you need big teams. But it’s a fine line. You can’t end up with the Globetrotters/Washington Generals structure of the European leagues. I guess the other strategy is to go big anywhere they can. Stop expansion with the exception of teams that can/might reproduce Atlanta. But over the next 10 years, how many teams can the league move to stadiums that seat 50k or more and how many would be viable? If the answer is effectively zero, then there isn’t much of a strategic choice to make.
I think Duffy's argument is that it matters even more. Adding teams doesn't just divide what's left of the national TV money into ever smaller slices of the pie -- especially if the pie isn't growing much -- it produces fewer good games to sell which impacts not only TV, but also ticket sales. The Big 10 has seen this already, particularly for a team like Wisconsin where the quality and pedigree of the opposition has had a direct impact on the number of distributed tickets that are actually used. Usage is important because of the sales of merchandise and food that occur in the stadium. https://madison.com/wsj/sports/coll...cle_532f934f-a5eb-5a9b-9291-3614144f9440.html It makes sense. Even if the number of distributed tickets is about the same, there won't be many empty seats at Camp Randall for Ohio State, but for Rutgers you'll see a bunch. As the league grows, how anxious are fans to see many of the teams in MLS? A keystone concept of any merger or acquisition is that the sum should be greater than the parts. If it does, meaning the value or income is greater than either would have realized otherwise, it's "accretive." If it doesn't, it's "dilutive." From what Garber told the Tennessean, adding teams helped MLS expand its national TV audience, which would result in higher TV deals -- it would be accretive. If that's not the case, the case for expansion seems far less sound.
At first blush, I agree, but in many cases those dollars are the difference between breaking even and losing money for many MLS teams. Beyond that, I think the league's plan was based on the assumption that this was the single area that had the biggest upside for future growth. As I noted above, I think "filling in the map" and adding teams in bigger media markets was predicated on building a larger national TV audience. If MLS must move forward where attendance must remain the primary driver of revenue, it's got to figure out a way to sell more tickets and, in smaller venues, get more money for the tickets it is selling. If it can't, it's going to see revenue stagnate.
Perhaps I 'm thinking in terms of a more extreme outcome. If the choice is between streaming Notre Dame or the average Big10 game, people might choose Notre Dame, particularly if adding in low quality teams brings the Big10 average down. On the other hand, a package deal of Michigan/Ohio State + a few others might be competitive. However, there is no package of MLS games that would compete with streaming Real Madrid (or whomever). You restrict the league to the top 10 teams, you expand to 40 teams, it doesn't matter. Neither setup will be competitive on quality. All TV goes away except for people who have strong regional identifications and don't care too much about quality. Obviously, this is an extreme, but what do you do if you can't compete on quality?
To answer the question, I think you have to consider the problem differently than the conventional MLS business plan. Let's consider the Big 10 for a moment. There are 7 Big 10 teams that averaged over 70,000 people a game last year, putting all of them in the top 20 nationally. Iowa isn't far off in 22nd and Notre Dame is 17. By including Notre Dame, each of these Big 10 teams could have 7 high quality games that would draw well and, based on alumni and fan base alone, get a decent TV rating. These aren't all great teams, but they fill big stadiums and they have following. They are marketable. The problem is that half the conference is essentially surplus to the plan -- in fact, absent an important rivalry that fans really care about, they actually drag on the plan. Which is really Duffy's point. Having built the Big 10 for cable and a cable network, what happens when people cut that cord and fans have to choose to shell out their cash for a particular team. Rutgers now becomes a liability, as does about half the league. Yes, quality is important, but I think we tend to view quality as some abstract, unobtainable standard. To me, the key is a team needs to be good enough in a big enough market that you can draw a lot of fans, both in the stadium and on TV. So let's work backward. What would it take for the Galaxy to draw an average of 50,000 a year and get a million people worldwide to buy their games in an Amazon Prime subscription? For starters, they would need a stadium. Say something like this -- the now dead Farmers Field: And they need better players -- they don't need a roster that can beat Real Madrid, but they do need a roster that is entertaining. Again, I think the Big Soccer purists are often missing the point in talking for academies and kids to play more, for most people this is only entertainment. Get a big name manager and buy some big name talent, and even if they aren't Real Madrid, I think people will watch. Stick young kids out there who know one has heard of and are at best competitive, and they won't. If you doubt me, look at the Galaxy attendance before and after Zlatan. But onesies and twosies do not a league make. This can't be a couple of super teams any more than it can be 24 blandly similar teams. Not in a world where people will have to choose the games they pay for. Still, this is a big, rich country that is sports crazy. You don't need 30 teams, or even 24 in the streaming world IMO. Are there 10? We are so caught up in the narrative that MLS needs to be like other pro leagues with about 30 teams, but what if the predicate for that -- a national TV audience for broadcast deals -- simply isn't going to be true in the future? Ten teams drawing an average of 50,000 is an earthquake. Are there 10?
Ar 10 teams going to draw 50K playing each other for 30-ish games? That's seeing the same 9 teams 3-4 times a year playing "your" team. Or do you reduce the schedule? But then they need to draw even more each game.
They'd have to play every team four times IMO, twice at home, twice on the road. Would that schedule be sufficiently attractive to draw those kinds of crowds? I'm not sure. What I am saying is that if the TV money stagnates or declines, which seems highly likely given the trends in the industry, MLS faces a huge challenge if it is going to continue playing in 20,000 seat stadiums with match day income (ticket sales and in stadium sales) as its primary source of revenue. Back in 2011, Morgan Wick wrote in Bleacher Report, "by setting the ideal size of a soccer-specific stadium at around 20,000, MLS was effectively accepting that the popularity of the league would never exceed that level—and that its fans would never reach the number, and the game-day experience would never achieve the quality, seen in Europe. Twenty thousand isn’t “normal” in the Premier League—that’s the size of its current smallest stadium. And there are only five MLS venues, one of them only barely, with larger capacities than that of Wigan’s home stadium, the third-smallest in the EPL. The league’s top teams don’t seem to have a problem playing in stadiums with over 40,000 capacity." https://bleacherreport.com/articles/950561-why-mls-may-be-making-a-huge-mistake Of course, in 2011 MLS could rightly claim that growing TV rights deals held the prospect of significant upside for financial growth and smaller stadiums that were full looked better on television too. But what happens if the pot of national television gold never materializes? I freely acknowledge getting 50,000 people to the stadiums for an average game won't be easy. Not only is MLS average attendance less than half this number, when we do get it, the actual number of tickets scanned is even lower. In 2015, Orlando City's first season in the league, the city's attendance figures for the first 12 games were more than 17% lower than the team's numbers. http://www.latimes.com/sports/soccer/la-sp-soccer-baxter-20161029-story.html To be fair, MLS isn't the only league where scanned attendance is lagging behind announced attendance. College football scanned attendance -- the tickets that are actually used -- was only 74% of the announced count in 2017, and it's declining. Still, the bigger, higher profile teams are doing better in getting people to the stadiums compared to the lower profile leagues and programs; In the Mid American conference, scanned attendance was just 45% of the average 15,394 that was announced. https://www.wsj.com/articles/college-footballs-growing-problem-empty-seats-1535634001 It's been an effective strategy for the past decade, but it's hard to see where compressing payrolls and playing in small stadiums is going to work in a digital world. It won't generate a national TV audience that will pay for the product on a streaming platform and it won't generate enough match day income in the stadiums to pay the bills. While it isn't a unique problem to MLS, that doesn't change the fact that the money has got to come from somewhere. If the league is to afford better players, difficult as it would be, boosting attendance seems the only option that has some prospect of success of generating more money to pay for them. Do that, and MLS might have a chance to market more attractive games in a streaming world too.
Usually that's the right answer. The plan has served MLS well to date. But the pace of disruption and change is so fast now, it's like nothing we've seen in my lifetime. I can only tell you what very smart people are telling corporate directors of a myriad of successful companies right now -- more of the same may be the most risky strategy to pursue. So, against this backdrop of rapid change (to me) the question is this: is MLS prepared for change? Rapidly expanding on its way to 30 odd "Lake Wobegone" teams (none great, but all above average), filing in the map with lots of teams in small soccer specific stadiums in an attempt to create a national audience for MLS television games so MLS can get bigger broadcast deals on cable television -- none of that seems where the world is headed now. Video now accounts for two thirds of mobile device usage. If the fundamentals of the plan have changed, the longer MLS takes to adjust, the harder it will be to adapt.
To address we would need to cover what the driving factors for success would be. The viewership's desire for live games versus recorded, The viewership's use of the platform versus other platforms, and overall online traffic for the platform. I'm picturing binge-watching culture where a lot of young viewers prefer to watch re-runs constantly or sports highlights. I feel MLS could take advantage of this. http://www.totalmls.net/blog/2018/4...-british-football-fans-are-turning-to-america British fans are loving the unpredictability of the league, and with MLS having a summer versus winter season, Europe is a big opportunity for viewership and Ad money. Online platforms would make MLS games more accessible to Europeans.
Lots to cover and I'm too depressed to make a high quality go at the moment, yet I'm compelled to offer some thoughts before they escape. - The Big Ten Network drove the play for expansion, partly to grow their revenues but also to make an impact on the national landscape where collegiate conferences are competing against each other. Their move impacted the ACC's strategies and reduced the Big East to a non-football entity. So while it negatively impacted their attendance figures a) almost any realistic option was going to do that and b) there was a net gain to be made in solidifying their footprint compared to other conferences. Further, with college it's not just attendance but alumni, and the Big Ten are masters at using their HUGE enrollments to produce volumes of alumni who will vest in their schools. While the CIC is in truth little more than a group lobbying and purchasing arm the Big Ten's academic consortium is a strong brand for wielding influence and luring both donations and R&D funding to the schools. In selecting Maryland and Rutgers the Big Ten may have taken hits on the gridiron front but they've made a case for being seen as a strong university partner for businesses within the DC-Philly-NYC area. Which is to say any marketing comparison between a pro league and colleges is at least somewhat tenuous. - Re: MLS providing quality matches for TV 1 I said years ago that the league should expand aggressively while the calibre of play was, to put it gently, modest. Do it while the casual fan doesn't know better and while the league and teams were building the foundation for growing more talent. We've seen a small degree of this because the play has indeed improved now that the teams can get higher quality players in positions 4-14, and I feel that's the trend that we need most of all. Adding 1 star player to a side of middling talent doesn't truly impact a game, but if you add 3-6 guys who have quality control and better positioning and the game looks noticeably different. Years ago we could watch the Premiership in the morning and then an MLS match that afternoon and find a contrast so stark it was comical. Lousy first touches, tons of unforced giveaways, disorganized attacks. The difference is still obvious to the knowledgeable fan today but the product if far less inferior, and the slow-burn approach to build community support and academy talent will pay similar dividends over time. This will also help foster improved US talent so we can begin cheering locals and hopefully yield benefits for the USMNT. When we gather in the stands for ATL matches we've no delusions that our side can compete with Barca or the best in the world. All that matters is how they stand in MLS, and because the calibre of play across the league has improved the value of succeeding in MLS is that much more worth while. - RE: MLS providing quality matches 2 I get the concept that if we concentrated the talent into fewer teams we'd most likely see even better quality matches. But would that endear more fans to broadcasts? I don't think so. MLS sought expansion in large part because when they were at their smallest the national perception was rife with skepticism, as if any league that small can't be worthy of attention. All of the other major US leagues had their corresponding minor leagues and/or colleges to show depth of fan support, whereas around 2003 the US had, what 10 MLS teams and about 15 minor league teams? It looked small time, and since the talent was always going to be lesser than the major European leagues it reeked of "Why bother?" For better or for worse US sports fans demanded something bigger, something that invited options for when fans did pay attention, something that invited more than 1 minutes of highlight potential on SportsCenter, and something that would tap into the city-vs-city consciousness of the typical fan. At least, moreso than Columbus vs San Jose. Further, with a bigger league and the ability to host games on their own schedule they've finally been able to provide matchdays that feel proper, where fans know there will be lots to take in from scoreboard-watching and a lot more fans nationally partaking in the league just as we. We may not have a proper Gameday yet, but it's closer, and the volume of games almost always ensures that somewhere there was 1-2 good games, 1-2 great story lines, and volumes of highlights for Ale and others to showcase. Yes, MLS will need to evolve in their media savvy and outreach so as not to be caught in the last century as fans use alternative modes for viewing. But that's behind the scenes stuff, and their path on the pitch and in the stands should keep straight on. To paraphrase A League of Their Own, until recently they've had to sell a product when there was no product. Now there's a product.
A very thought provoking reply -- let me just hit the highlights. I agree with that (and the further point that for University presidents there are other issues as well. The larger point is that for most Big 10 fans, I don't think they believe the money was worth the dilution. That wasn't really a theme when either Penn State or Nebraska joined the conference (aside from Nebraska not having AAU membership), but it has been with Maryland and especially with Rutgers. If the economics of the Big 10 Network change and the windfall ceases, I think that discontent will grow. And while there are differences between colleges and professional sports, in this area I think there are many more similarities on this basic question: if generating more lucrative broadcast deals (whether on a cable channel the league controls or otherwise), what happens if the economics change in a material way? Absent the Big 10 Network, I don't think there is any way on earth Rutgers is invited to join the conference. Absent trying to build a national TV audience, would MLS expand this aggressively? We are talking past each other here IMO. Most Atlanta fans, yourself included IIRC, know full well that MLS initially was reluctant to let Blank put this team in a big, downtown stadium. MLS rejected that choice in Minnesota at about the same time. To his great credit, Blank was confident it would work, stuck to his guns, and he was right. It's a high quality, professional looking product in a way that looks very different than, forgive me, a game when Atlanta plays the Fire in Chicago. The players are the same, the presentation isn't. And here is where MLS is struggling IMO. The league's plan is predicated on a 20,000 seat vision. They have literally set that plan in stone and bricks and steel. Simply from an income generation standpoint, that limits the quality that the league can afford, but that will be exacerbated if broadcast revenue drops. That's fair enough -- it's the conversation I hope this thread will foster. For now, my response is that to broaden the TV audience, it is far more about entertainment, and even though the first touches have improved, is MLS really more entertaining for fans watching on TV? The TV data doesn't seem to support that it is. Watch the video from 2007 again -- over 60,000 in New York to see the Galaxy and Beckham. https://www.mlssoccer.com/post/2013...-mls-start-red-bulls-galaxy-thriller-sideline I can't help but think MLS has thrown the baby out with the bath water. Yes, the lower parts of the MLS rosters had to improve and they have, but fans don't seem to value that improvement (at least as far as ratings indicate) because, I would argue, the league is much bigger and homogenized, the story lines are harder to follow, and it has less sizzle at the top.
About 15-20 years back, ManU explored micro charges for streaming their matches, and the revenue projections were massive, so at the top end, yeah, that will eventually be a piece of the answer. MLS will not capture that, and tghe reason is simple: If has to already be captured. The end is nigh, and without the rep in a world that offers broadcast, it willb e even more difficult to create rep. I watch MLS in Germany. It's a streaming service through Eurosport. They run the games without commentary or graphics, just a camera showing the action and at halftime we see a lot of folks going for beer. for the right to see this, I pay $5 a month. Is MLS going to move from this to must see footie because Atlanta and NYRB play four times a year? Simple answer, probably not. It will aspire to remain a niche player. The digital age creates giants, and kills everyone else. Sport, however, does have an in person element that means it is likely local sports teams will surive while local newspapers, shops, etc might not. Without more revenue from broadcast fees, MLS will continue to grow as a game experience league. Their streaming market will be local, and maybe domestic. This won't be a deadly thing for the league, but the league won't grow at the rate it now is for very long. The digital world will create definite haves and MLS will clearly be in the realm of have nots. They won't be alone in his. Euro mega clubs will almost certainly form the long rumored super league, leaving behind diminishing clubs to piddle about with low streaming numbers also from local audiences. There is an upside for MLS in this notion: As broadcast revenue shriks, player expenses will fall, a lot, and MLS will be able to compete with leagues of also rans in other nations once they are stripped of the Bmunchs, ManUs, Barcas and etc. There will be a handful of clubs playing ungodly wages. Everyone else will be on much more even financial footing.
True, but college football and its teams are known commodities. Fans knew what they were getting versus what they had. That's not the case with MLS expansion where even known brands such as Minnesota and Cincinnati will be different products as they make the move. What's more pro fans have a different type of association with their teams - College fans have an association with universities that breeds fanhood even if they never attended the school because the institution allegedly stands for something bigger about the whole state. These things have factored into the equation as the power conferences choose winners and loses among the landscape. It's a rigged system that deserves to be mothballed. No doubt, but a lot of that will also be on a comparative level. If revenues fall across all major conferences then it might be less about Rutgers and more of people getting tired of a sport that caters to the same 20 or so brands to the point where these teams get to have twice the number of home games. Yay, sportsmanship! I can agree, but this is about more than just TV. Like I said, MLS is building a product to offer across multiple platforms and on various fronts, including merchandising and building facilities. Commanding attention and garnering investment means you need to get consumers to buy in and become fans, and that's not gonna happen with a measly 10 team league in a country this size. It's simply unrelatable. Too many cites would feel uninvolved, and there wouldn't be enough MLS product to distract consumers from the other sports leagues and teams. It's not simply about watching the best but also about watching a team to which you can relate and feel connected. I watched MLS as a fan before but wasn't nearly as vested as I am now that Atlanta is in the mix. Now I watch more non-Atlanta matches because I want to see how the league is shaking out and may affect my team, whereas before it was simply "Okay let's support the US league and see who's on today." A) Context matters. The smaller MLS stadiums are a reaction to a time and place when the TV production hated showing 10k fans in cavernous NFL stadiums. Venues for which MLS teams couldn't control the revenues or the schedules. The move to right-sized stadiums saved the league and provided the business sensibility needed so that the soccer folks had more clarity over their budgets. B) You can get quality production in smaller venues, as witnessed overseas and here in places like SKC and Portland. The difference is connecting with the fans so that they show up and in the quality of the TV production. The latter has gotten infinitely better as we have a depth of quality announcing and report previously at a premium in the US and the broadcast partners are investing in the supporting programming. Graphics and analysis are more readily available and relatable to fans such that many fans of the league today have no prior connection with the sport but they can digest strategies and formations. Conversely, how many games from South America, or Italy, etc have been available for viewing with arguably superior skill but came across as poor viewing because the production was lackluster and the fans were sparse? Having a grade A product on the pitch is just one piece of the broadcast appeal puzzle. The NASL in its 70's heyday barely registered on the national scene. Pro soccer in the States has had so many fits and starts that even die hard like myself were skeptical at every new league. We finally have something that works because of the business practicality being applied, and I for one am willing to ride that out. I don't need to supplant the NFL or the Premiership, I simply want a top flight that can thrive and give soccer a home here. Without that the minor leagues would have even less appeal to fans and players, too. Most importantly the MLS isn't operating in a vacuum. It's competing against the most crowded sports landscape in the world, so even if we had more big names and teams I doubt they would surpass the NHL in ratings and revenues until they could demonstrate staying power at that level. El Traffico just isn't Michigan vs OSU and never will be. I've no problem with ambition but MLS doesn't yet have the financial or undying fan support needed to feel so secure that they can take great risks. I'd rather keep this thing alive as is than pull an Icarus and go out in a blaze of glory.
The NBA is offering fans the ability to buy the 4th quarter of games on a stream this season for $3.99(?).
I believe it was $0.99 for the final quarter during the test phase and is now $1.99. I believe most of the growth will be due to legalized betting more than wanting to watch the end of the game, because they are largely meaningless until April. I imagine prop bets like over/under points in game, points in a quarter, etc will make it very popular among casual gamblers, especially those using their phones. I do not know if MLS or even soccer has similar pull from average fans.
I'm a fan of Man U and the Red Bulls. It could be good for MLS if players not good enough for Super League clubs choose MLS over what's left of the top one country leagues in Europe, but that is not enough of a reason to make me want a Super League. Clubs that are used to success would struggle in a Super League because half the clubs have to be in the bottom half. Arsenal was sixth in the 2017-2018 Premier League, so they didn't qualify for the Champions League, but I think they would be invited to a Super League with 20 clubs. If you assume their Super League performance would have matched their domestic form, they would have finished behind the top five in England, the top three in Spain, the top two in Italy, Bayern Munich, Paris Saint-Germain, and possibly others. That would put Arsenal 13th at best. Would Arsenal fans want to be in the bottom half for three consecutive seasons? That could happen in a Super League. Although Spain has the best league, I think the sixth most popular English club might be invited over the fourth best club in any other league.
There's no disputing that the most popular American leagues have 30 to 32 teams. However, they don't have to worry about the quality being good enough. Would fewer clubs and an increase in quality be good or bad for MLS? I don't know, and I'm going to make a poll about what fans prefer.
Since the time has passed since the league could choose to have 16 equally good teams, I think the choices are two. (1) Stick with 30 equally mediocre teams, or (2) adopt a more European model with say 8 good teams and 22 bad teams. If there are two or three national (or international games a week) you won't always get a good team against a good team, but you can get a good team against a bad team and if you root for the good team, that can be an entertaining win. The obvious problem is whether people will go to see their bad team. My assumption has always been that they wouldn't given the other entertainment options available. Triplet, you're a Minnesota fan, would you go if you never thought they would have a chance to be in the top third of teams? And stadiums are the other problem. Teams in stadiums that can hold 30k. Atlanta Seattle New England Vancouver NYC Toronto LAG NYC at some point will have to move and probably move down, LAG would probably only move up if they were bought by Kroenke so they wouldn't really pay rent in the big new LA stadium. I guess you need to be planning for 10 years out, but that's the timetable we're talking about.
Well here's where I think MLS is being unfairly criticized. The other major US sports leagues aren't great because of their size, they're great because they represent the highest level available for their sport. They would still be if they added more teams. MLS will, almost assuredly, NEVER be the pinnacle of soccer. But the thing is, they don't have to be. So, serious question, where exactly is this particular threshold that would allow MLS and its fans to not worry about "being good enough?" Is it our standing in the perceived global pecking order? Is it routinely beating LMX teams? Is it having more expensive stars? At what point do we feel comfortable about not matching La Liga stride for stride and simply enjoy it for what it is? Or is that impossible to accept as Americans? - - - - - MLS isn't mediocre (or whatever people think about it) because of the # of teams, it's that way because of the budgets. If you lower the number of teams the league revenue won't magically skyrocket, even on a per team basis, because broadcasters, advertisers, and sponsors will perceive a lower value in the investment. "Oh, you only penetrate 16 markets? Okay, then we'll pay you Y instead of X." Further, since in any league you can't have winners without also having losers, reshaping the membership simply means a new set of names will spend more time at the bottom, which in turn may well affect attendance. (Notice the drop offs in Houston and Orlando.) So if you simply take the teams with the best attendances we can't assume the counts will remain the same in the new world order.
Thanks for the old thread and starting a new one. Technological change is coming at a dizzying pace that absent some type of cataclysmic events, will only continue to increase. The impact on MLS will be an interesting one. The stadium vs TV changing is an interesting dynamic to look consider and as usual you make some persuasive arguments. In the winner take all view, only a handful of super clubs such as Barca, Madrid, Bayern etc. get eyeballs. I watch games from La Liga, EPL Bundesilaga. But if the game does involve one or two of the top 5-10 teams in the world and a pretty decent opponent I rarely have much interest. I'd rather watch an MLS game that has players I know and I can see in person and games tailored to my time zone. I doubt I'm all that unique. However, much like the previous thread, I'm more bullish on MLS position because I look at things from a regional point of view and I think regionalism matters quite a bit, even in an increasingly global world. While people time shift entertainment, Live matters in sports and as such, so do time zones. I also Europe going to go through some convulsions as the small teams begin to pit themselves against the bigger ones for survival and MLS can take advantage of this. There has been rumbles of limits on loan players. When the TV money starts to dry up, there will be more Technical skill is just one aspect of quality. Competitiveness of the game is an important aspect of quality. Emotional level of the players and atmosphere of fans impact perceived quality. One of the biggest money makers in sports is the NCAA basketball tournament. The technical skill level of players is not very high, but the quality of everything else is. In the digital world games are just part of the content. Many people don't even watch full games anymore, but instead just highlights. More teams mean more highlights to choose from, more stories to tell and a much bigger audience with an interest in those highlights, content, local streaming packages. Finally just spitballing here, but I wouldn't be surprised to see a multi-tier league, or even a pan North American league to compete with the inevitable pan-EU league. Toronto has plans to grow to 40K by 2026. Atlanta, Seattle have NFL size stadiums and big cities hoping to join the super league can either build or partner with stadium owners as well.
This is a point that deserves repeating. College sports, compared to pro, suck, yet maintain high levels of revenue and supprot. That is the advantage MLS has over the euro leagues. Euros have, and will continue to have, all the other advantages. but the live element to enjoying sport is strong enough that this will be enough. The level of play may not rise much more, but the level of play elsewhere will sink, so they'll be better than some by comparison, and vastly inferior to the few. What the digital/streaming reality will almost certainly be for most clubs around the world is a train that does not slow down at their station. The $5 billion TV deal the Bund is working with right now is rising all boats. But when it becomes a streaming world, the breakdown on that money won't be divided by 18, or some still fair but skewed to the bigger clubs version of that. The Bmunchers will know their brand represents about 80 percent of the global value of the league, and when it's about streaming, they will collect that 80 percent, and the others can look at their thriving gate revenue and realize they simply inhabit a different world. The Super league will come, by necessity, from this. It will probably look like the NFL, which owners here all envy. There will be conferences (so that it isn't so easy to see that Arsenal finished 17th), and playoffs and as many clubs as can support themselves at this level (there will be minimal revenue share, but this will be a survival of the fittest structure because that's what the digital world does ). They'll probably opt out of FIFA at some point, as they will want total control of their players, their scheduling, etc, and because they'll be so much bigger than the World Cup that, really, what's the point? I mean, it is all guesswork, but the money the already super rich will be playing with in this world is likely to be ungodly, even when compared to today. The ManU estimates were that with microcharges, their global revenue could be several billion a year. For ManU, not shared with 19 others.
I think you are right on the mark. Even in other industries, retail for example, you see digital creating massive companies because they have expanded the trade area much further than the conventional bricks and mortar store ever could. Even so, there is room for a "local" option, but faced with all of these additional competitors the space for the local competitors is a lot smaller than it was. Now, I appreciate many are thinking, "so what else is new?" MLS has always faced still competition from other leagues for broadcast revenue. The difference here, which you note in your second post in more detail, is that moving from a "cable" model to a streaming model will allow the super clubs to become giants -- likely with money that is not shared. Today, the ManUs of the world benefit from the EPL's broadcast deals, foreign and domestic. Soon, very soon, with streaming there will be no need to share that money, they can do it themselves. To me, that puts much more pressure on MLS to live off of attendance (more accurately, "match day" revenue, which includes both ticket sales and game day concessions, pro shop sales, and other ancillary income generated by fans buying stuff at the stadium.) I realize that $90M in national broadcast revenue doesn't sound like much (and when you take out USSF's share, it's even less than that), but the league keeps every penny of that revenue to apply to league expenses, the largest of which is player payroll. In 2017, guaranteed payroll was just over $249M. http://www.latimes.com/sports/soccer/la-sp-mls-salaries-20180511-story.html Assuming MLS' share of the national TV money was about $70M (an educated guess), that broadcast revenue represented 28% of the direct payroll costs this year. I haven't done it for this year, but when you back out that portion of DP salaries paid for by the teams (not the league), the national TV money has typically covered about third of the cost of league funded payroll. League sponsorship money and the league's share of the general admission ticket revenue provides the rest of the money the league uses to pay expenses. The bottom line is that if the national TV money essentially stalls or declines as more and more viewers turn to streaming, the only way for MLS to increase payroll spending significantly in the years ahead is to either increase sponsorships (possible) or boost ticket revenue. Even if attendance is flat, increasing ticket prices will provide some additional revenue each year, but realistically, to move the number in a meaningful way each year, MLS has to sell more tickets. That's not easy as the league is now constructed. Many of the soccer specific stadiums have limited capacity and the league only gets a third of the general admission ticket revenue.